SHILPAX LABORATORIES LIMITED
ANNUAL REPORT 2001-2002
Your Directors have pleasure in presenting the Fifteenth Annual Report and
Audited Accounts of the Company for the year ended 31st March,2002
TRANSFER TO RESERVES :
In view of losses suffered by the Company and erosion of Company's Net
worth, no amount is transferred to the reserves.
In view of losses suffered by the Company and erosion of Company's Net
Worth, your directors have not recommended any divedend for the year 2001-
OPERATIONAL PERFORMANCE :
The sales turnover of the Company for the 12 months period was nil and
other income amounting to Rs.42.14 lacs which is not actual income and is
due to excess provision made for Income Tax during earlier years is written
The net loss for the 12 months period are at Rs.86.18 Lacs as compared to
Rs.131.80 Lacs in the previous period. Reduction in loss is due to Other In
-come as mentioned above and reduction in expenditures..
Your Directors have repeatedly reported since last few years that it has be
en very difficult for the medium size pharmaceuticals Companies like yours,
to withstand the sluggish market, dumping of low cost products by
neighbouring countries, cut throat competition with big pharma houses and
multinational companies. Many medium size Pharmaceuticals organisation have
closed or not finding any escape routes. Our Company was no exception to
this. Entry of MNC's only added to the woes of the already sucked mid sized
NOTE ON SICKNESS OF COMPANY
The Company made a reference to the BIFR under, sick Industrial Companies
(Special Provisions) Act,1985 (SICA) on 15th september,1999 which was
rejected by the BIFR. Against such order of the BIFR, the company made an
appeal to the AAIFR and the order of the BIFR rejecting Company's reference
was reversed.The AAIFR directed the BIFR to reconsider the reference afresh
on merits. The BIFR on 26th March,2002 held that the Company does not
qualify to be an 'Industrial Company' within the meaning of the Section
3(1) (o) read with section 3(1) (e) & (f) of the SICA.
DISCLOSURE AS PER LISTING AGREEMENT:
The Company's securities are listed at the following Stock Exchanges:-
The Delhi Stock Exchange Association Ltd., 3/1, Asaf Ali Road, NEW DELHI -
The Stock Exchange Mumbai, Phiroze Jeepee Bhoy Towers, Dalal Street, MUMBAI
Jaipur Stock Exchange Ltd. Jawaharlal Nehru Marg, Malviya Nagar, JAI PUR -
The Company is in default for payment of Listing Fee to each of the above
Stock Exchanges amounting Rs.1.57 Lacs.
ENERGY CONSERVATION,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
Information of energy, technology absorption, foreign exchange earnings and
outgo pursuant to Section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in Report of Board of Directors)
Rules, 1988 are not required to be given as no manufacturing activities are
being carried out since February, 1998.
During the year under review the Company has not invited Fixed Deposits
form the public and/or shareholders. Hence Section 58 A and 58 AA of the
Companies Act, 1956 and Rules made under the Companies (Acceptance of
Deposites) Rule, 1975 are not applicable.
Sh.J.M.Gupta resigned form Directorship of the Company ans Sh. Ram Sharma
was appointed as additional director w.e.f. 29-6-2002. The Company has been
received a notice under Section 257 of the Companies Act, 1956 alongwith
requisite deposit proposing canditaure for the office of Director.
Sh. Arvind Bhargava retires by rotation and being eligible offer himself
M/s HarvinderArora & Associates,Chattered Accountants the statutory auditor
of the company retire and being eligible offer themselves. for
M/s Harvinder Arora & Associates, Chartered accountants have furnished a
certificate under Section 224 (1 B) of the Companies Act, 1956, to the
effect that their appointments as Statutory auditors for the financial year
2002-2003 will be well within the limits as prescribed under the Companies
EXPLANATION ON QUALIFICATIONS MADE BY AUDITORS OF THE COMPANY:
Pursuant to the provisions of Section 217(3) of the Companies Act, 1956
explanation on qualification made by Auditors of the Company in their Audit
Report dated 29-6-02, are as under:-
Para 3/4 of Annexure to Auditors Report:
Present Directors promoted two other Companies and have been on the Board
since inception. All Companies have became sick being in the same line of
Business.Presently only promter Directors are on the Board of all Companies
and independent professionals who were inducted on the Board have resigned
due to sickness of Companies. This has resulted in common Management loans,
where ever provided/taken/granted have been without any interest.
Para 5/6 of Annexure to Auditors Report :
Loans and advances granted by the Company related to previous years and in
few cases company has initiated legal action by issuing them legal notices
for recovery. Necessary action shall be taken for court proceedings if
negotiation consequent upon issuing legal notice fail. Company has not
immediately filed court proceedings due to liquidity crisis.
Para 13 of Annexure to Auditors Report :
Please refer note on sickness of the Company. The Company may prefer an
appeal or file a fresh reference to the BIFR.
As per the directives of the Central Government,the Company is required to
appoint a Cost Auditor to conduct the Cost Audit of the accounts maintained
by the Company in respect of Bulk Drug. However in view of no manufacturing
activities being carried but by the Company an application was made in the
year 1998-99 to the Deptt. of Company Affairs, Cost Audit Deptt., Govt. of
India for exemption.
CORPORATE GOVERNANCE REPORT :
The company is incompliance with most of the requirements of uniform code
of corporate governance. A separate section as corporate governance report
has been included in the Annual Report of the company.
DIRECTORS RESPONSIBILITY STATEMENT:
Directors hereby state that to the best of our effort:
1. In the preparation of Annual Accounts, the applicable accounting
standards have been followed;
2. The Directors have selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
pretend so as to give a true and fair view of the state of affairs of the
Company at the end of financial year and of the profit/loss of the company
for that period.
3. We have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provision of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
4. We have prepare the annual accounts on going concern basis.
There is no employee with respect to particular are required to be given in
term of section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975.
The Directors take this opportunity to convey the deep sense of gratitude
for the valuable assistance and cooperation extended to the Company by
bankers, investors, customers, suppliers, employees & workers for their
continued support for the working of the Company.
On behalf of the Board of Directors
Place:Surajpur(U.P.) Arvind Bhargava
Date :29th June, 2002 Chairman